An affiliate program is an often overlooked many online businesses and eCommerce store owners. However this marketing strategy is a very powerful digital marketing strategy that is used by almost 80% of major brands.

What is an affiliate program?

An affiliate program is type of performance based marketing which rewards website publishers a commission based on any customer or visitor generated by their marketing efforts. Those who join affiliate programs are known as affiliates and those who run affiliate programs are known as merchants.

In plain English, you get paid by sending customers to a website that sells a product or service.

how affiliate programs workHow does an affiliate program work?

Website publishers or affiliates can join affiliate programs for free. Typically you can find a link to an affiliate program at the bottom of most websites. It normally takes a couple minutes to fill out the affiliate signup form and in some cases a certain criteria must be met such as having a website, being within a particular niche or having a certain amount of traffic in a given month.

Once someone is accepted into an affiliate program they will have access to a dashboard which typically provides stats on earned commissions, access to banners or creatives and unique links used to track any sales generated. From the click of a banner on a website to the completed sale, every step of the process is tracked using cookies.

What are the benefits of an affiliate program?

For businesses setting up an affiliate program means paying a commission based on a fixed dollar amount or percentage of a sale. Depending on how rewarding the commission may be can influence how active or aggressive affiliate marketers will be in promoting a product or service. Affiliates are similar to sales reps working for an online business that only work on a commission basis. The only time advertising dollars are only spent is when an affiliate generates a sale.

For businesses an affiliate program can mean any number of benefits including:

  • More qualified leads
  • Increased sales
  • Extend your brand and reach
  • Viral marketing
  • Performance based, you don’t pay money unless you are making money
  • Get better search rankings from more inbound links generated by affiliates
  • Save money without sales staff
  • Low cost to launch an affiliate program

Not sold on setting up an affiliate program for your business? Check out the affiliate marketing stats below.

  • 80% of brands utilize affiliate marketing
  • Advertisers have seen a 15-40% increase in sales through affiliate programs
  • In 2015, 10% of Amazon’s 10 billion dollar revenue was a result of their Affiliate Program
  • 50% of affiliate traffic is from mobile devices

Affiliate Tracking Software vs Affiliate Networks

When launching an affiliate program a company must decide between integrating their own affiliate program software or an affiliate network which typically provides a more sophisticated platform. Alternatively you can also use both, but I find this is rarely the case.

Hosted Affiliate Software is by far much cheaper. There are plenty of WordPress affiliate program plugins and other software’s that integrate seamlessly which can cost as little as a couple hundred dollars. Normally the level of sophistication is proportionate to the what you pay.

Self-hosted software is yet another option to running your own affiliate software. In this case you are using a third party to manage the software for you so you don’t have to worry about software upgrades and better support.

Affiliate Networks are definitely more costly but provide a number of benefits including:

  • Better fraud detection
  • Are more trustworthy, as affiliates are more likely to deal with known affiliate networks and having all their programs centralized is easier for them to manage.
  • Save time as commissions are handled by the networks
  • Recruiting, since the proponent of affiliate programs are the marketers themselves. Affiliate networks already have thousands of publishers to promote your affiliate offers.

Looking to launch an affiliate program for your online business? Contact Nextoronto today!